May 13, 2016

"And I will tell you, this is owned as a toy by Jeff Bezos ... Amazon is getting away with murder, tax-wise. He's using The Washington Post for power so that the politicians in Washington don't tax Amazon like they should be taxed.... He thinks I'll go after him for antitrust... Because he's got a huge antitrust problem because he's controlling so much, Amazon is controlling so much of what they are doing. He's using The Washington Post, which is peanuts, he's using that for political purposes to save Amazon in terms of taxes and in terms of antitrust."

If Woodward want to write an exposé on how to get elected President, he should be investigating his boss, and the like cabal that funds the election, and disenfranchises the voters with incentives to stay home on election day.

Many Trump supporters apparently hated Obama's misuse of the IRS not because it was a powerful figure abusing power. It was because the other side was abusing power.

Or, many Trump supporters hated Obama's misuse of the IRS because it was a powerful figure abusing power, but are sick and tired of fighting with both hands tied behind their back while the other side is held to no such standard. Maybe this will make it a fair fight. Or maybe if a Republican does it then we could establish a rule that neither side is allowed to.

Note that I'm just speculating, as I'm not particularly a Trump supporter.

I think it is inappropriate for firms and individuals who are not in the publishing business, but have businesses and/or hobbies largely dependent on government goodwill to own public media, but I do not know how to write laws or regulations to prevent it without running afoul of the 1st Amendment.

However, as always: consider the source and look at the byline before reading the article!

I'm torn by this. On the one hand, I'm glad that Trump is calling Bezos out for his Hearstian shenanigans. On the other, I don't particularly relish the idea of paying more taxes on stuff from Amazon, assuming that's what Trump decides to go for.

On March 22, 2016, South Dakota Governor Dennis Daugaard signed into law Senate Bill 106, which requires any person making more than $100,000 of South Dakota sales or more than 200 separate South Dakota sales transactions to collect and remit sales tax. The requirement applies to sales made on or after May 1, 2016.

The law clearly challenges the physical presence requirement under Quill, and that’s precisely what the legislature intended. The law seeks to force a challenge to the physical presence rule as soon as possible and speed that challenge through the courts.

1) Amazon has been very quickly establishing a physical presence in states in order to provide faster shipping and because of this is now collecting sales tax in 28 states.

2) Sales tax is borne by the customer, not the retailer. The only way Amazon could be getting away with anything is the competitive advantage it gets in those states where it does not yet collect taxes. This list of states does not include California, Texas, Pennsylvania, New York, New Jersey, Illinois, Florida, Michigan, Ohio, Virginia, North Carolina, and 16 others.

3) Bezos is 20x as rich as Trump, employs more people, and, unlike Trump, built a really, really great company. And from scratch! Why not make him President?

Many Trump supporters apparently hated Obama's misuse of the IRS not because it was a powerful figure abusing power. It was because the other side was abusing power.

What does this have to do with the IRS? They have nothing to do with anti-trust. That is handled by the FTC.

The link doesn't work for me but Trump is saying in the snippet

"He thinks I'll go after him for antitrust... Because he's got a huge antitrust problem because he's controlling so much, Amazon is controlling so much of what they are doing.

He does mention that Amazon gets good tax rates but does not seem to question that. Seems like it would be legitimate to question whether Amazon is a "monopoly" or not under current law.

FWIW: I do not believe in the concept of monopolies except as abetted by govt. Taxi companies, for example. Power companies for another. I think Sherman should be repealed. I also do not think Amazon is a monopoly.

A year or two back Amazon was all for overturning Quill which exempts companies from charging sales taxes if they do not have a physical presence in the jurisdiction.

The reason is that Amazon has a physical presence in lots of jurisdictions already and is collecting sales taxes. When they start with their instant delivery boxes in 7-11s and such, drone delivery, Amazon stores and such, they will have a presence everywhere and Quill will have no effect.

This is an example of Amazon leveraging their size to advantage over smaller competition using government.

There are something like 600 sales tax jurisdictions in the US. They are all different, and charge different rates for different kinds of merch and services. Amazon can afford to build and maintain the massive system needed to comply with this. Smaller companies can't afford the cost.

They argue that the Clintons have been in the public eye for so long that they are "fully vetted" - the first part is true, the latter not, but at least it sounds plausible. In 2008 Obama was a total newcomer and was hardly vetted at all - reporters hadn't even read his stupid books, to the point where when Republicans pointed out some of the less salubrious things in the books, they were accused of making stuff up! And yet the WaPo didn't send 20 reporters to scour Chicago looking for dirt (because Chicago politics is always squeaky clean, doncha know?) - no, they sent their reporters to go dumpster-diving in Wassilla, Alaska.

Watching Donald Trump and Jeff Bezos go at it is kind of like watching two Kaiju fighting it out over Tokyo: no matter who wins the inadvertent destruction could bad for us all. One could envision a President Trump, in a fit of a pique, punishing Amazon for Bezos' transgressions with unfavorable taxes and new regulations that could raise prices for us all.

Why does everybody think of taxes first? The lefties are living in your brains. The Amazon pulldown menu lists 17 different departments. Why couldn't a Trump administration use anti-trust to force Bezos to spin off all departments but Video; Books & Audio; and Movies, Music & Games into four or five separate online vendors? Bezos might not want the ol' AT&T treatment applied to Amazon.

I have to admit that there's a degree of schadenfreude in "you have a nice business there, be a shame if anything happened to it" being directed at a liberal.

"Why couldn't a Trump administration use anti-trust to force Bezos to spin off all departments but Video; Books & Audio; and Movies, Music & Games into four or five separate online vendors? Bezos might not want the ol' AT&T treatment applied to Amazon."

Why should Wal-Mart be able to sell automotive services and children's toys? Groceries and electronics under one roof? Anti-competitive! Shut down their stores!

Trump is negotiating with Bezos for more favorable coverage. This is an opening, in public, just to give notice. The rest will be in private. See where this goes.The NYT is more complex. The actual ownership is more of a liberal interest consortium, Carlos Slim being, I think,merely a bagman.Trump could do the Carlos Slim angle (and boy is there material there), but it would amount only to mudslinging on the NYTs reputation.

"I think the argument is that Wal-Mert is not the only bricks & mortar retailer; Amazon is de facto the only online online retailer."

But they're not really. Amazon may be the largest in their space (like Wal-Mart), but for everything they sell there is a smaller, more focused competitor who can provide something Amazon doesn't (just like Wal-Mart's competitors).

"To be fair, there's a bit of Wal-Mart(R) and Amazon(D) rivalry going on here."

I(R) don't believe in punishing success. Amazon is large not because they're anti-competitive but because they provide goods and services efficiently at a reasonable cost. If you don't like Amazon for online retail, there are a host of other options.

Amazon is the only online retailer doing that much that well, but in each space there is at least one good competitor (i.e. Netflix for streaming video).

Amazon's biggest advantage is convenience and ubiquity - Everything you need is in the same place. It's sort of like the argument that Internet Explorer had an advantage by being pre-installed. . . . oh wait!

Diamondhead said..."To be fair, there's a bit of Wal-Mart(R) and Amazon(D) rivalry going on here."

"I(R) don't believe in punishing success. Amazon is large not because they're anti-competitive but because they provide goods and services efficiently at a reasonable cost. If you don't like Amazon for online retail, there are a host of other options."

It isn't about punishing success. It is about NOT punishing companies that DON'T have lobbyists. Amazon has taken a position in the market that no competitor can compete with. In addition they have a competitive advantage with other retailers that are subject to taxes Amazon is not subject to.

In addition to this Bezos owns a newspaper that allows him to influence the political sphere that creates the tax structure that is one of the key reasons for his success.

The whole point is not to tax people who are successful. It is to make sure the next Amazon can start up and compete with the current amazon and that the tax and regulatory system does not give entrenched interests any advantage.

"Amazon's biggest advantage is convenience and ubiquity - Everything you need is in the same place. It's sort of like the argument that Internet Explorer had an advantage by being pre-installed. . . . oh wait!"

The problem was before Microsoft was famously apolitical. They donated to neither side. Then the anti-trust suit came and they learned their lesson. They donate to many campaigns now.

"Hasn't made fun of Bezo's baldness, height or how he eats. Progress."

Because for Bezos none of these matter. He isn't on TV and few could tell him from Adam. Bezos doesn't need people to vote for him either. They are good insults for people who have their faces on TV all the time.

Maybe, they can spare one reporter from the Trump garbage pail snipe-hunt brigade to try & find that speech that the LA Times couldn't track down when Obama spoke to that pro-Palestinian group back before the election in 2008.

I mean, the Obama administration's just a few months from being history. What harm could it do now, hhhhmmmmmmm?

walter said..."Hasn't made fun of Bezo's baldness, height or how he eats. Progress."

No. It is because Trump is smarter than you. You are incapable of seeing things from Trump's point of view and your understanding of how the world works, your paradigm, is a myopic blunder of idiocy and projection.

Trump is able to find weaknesses in opponents and exploit them. You make stuff up that fits your view of the world. Fundamentally different paradigms.

FWIW, I think we need a new abbreviation for those, like me, who want to virtue-signal that they are not really Trump supporters before saying "he's really smart here." Maybe AIANATS (although I am not a Trump supporter), or ETIANATS (even though I am not a Trump supporter), or maybe INATS (I'm not a Trump supporter [BUT]).

"What taxes are those? Amazon customers in 28 states (including all the largest states) pay sales tax. Amazon collects sales taxes in states where other online retailers don't collect taxes."

Are you really that dumb? Ok...

Retail is about 2 things, Margin and Volume. Multiply those two and you get revenue. Subtract costs and overhead.

If Amazon is getting a 5-10% boost in margin in 22 states due to avoidance of sales taxes in those states this is an insurmountable advantage. 5-10% on the volume amazon does in 22 states is an absurd number.

No mom and pop retailer could hope to compete. Walmart paying 5-10% more in those 22 states will have to charge that much more everywhere. Amazon can take losses in some states and those would be dwarfed by the extra income they would get from a 10% margin boost. You have to be completely ignorant of how retail works to say what you are saying.

Actually you're right. The idle uninformed talk on this thread about "antitrust" is about punishing success. Trump's rhetroic is about punishing Amazon for being partially owned by the owner of a news company that is investigating a would-be President Trump.

"If Amazon is getting a 5-10% boost in margin in 22 states due to avoidance of sales taxes in those states this is an insurmountable advantage. 5-10% on the volume amazon does in 22 states is an absurd number. "

Are you that dumb? Sales tax is a pass through, meaning if they don't charge sales tax to the customer they don't make it in revenue unless they raise prices. If you were doing that, and it was an "insurmountable" amount, their net profit would likewise be insurmountable, no? Oh it isn't? Okay.

"If you want to get involved in business," Sen. Orrin Hatch warned technology companies at a conference in 2000, "you should get involved in politics."

Hatch was referring to the shortcomings of then-software king Microsoft, which he had spent most of the previous decade harassing from his perch as Judiciary Committee chairman. The message was clear: If you become successful, you must hire lobbyists, you must start a political action committee, and you must donate to politicians. Otherwise Washington will make your life very difficult."-----------------------------------------------------------------------------

And so on from there. Also a great argument for the existence of the "uniparty".This was, after all, Orrin Hatch (a great big R). No doubt the (D) were doing more than their bit too (I had a thing along the same lines from Joe Biden IIRC).

"Are you that dumb? Sales tax is a pass through, meaning if they don't charge sales tax to the customer they don't make it in revenue unless they raise prices. If you were doing that, and it was an "insurmountable" amount, their net profit would likewise be insurmountable, no? Oh it isn't? Okay."

I check out how much it costs to buy product X.

Mom and pop store $100 + 10% sales tax = $110.

Amazon $100 + no sales tax = $100.

You are just being an idiot. And this is level 1. I am going to go to level 2 though I have probably already lost you here.

Amazon gains 1,000,000 sales on product X in State A because it is able to offer product X $10 cheaper than any of the competition. It's margin is 25%. $25 x 1,000,000 sales = $25,000,000 in net revenue. It takes this money to state B where it has no competitive advantage over mom and pop. But it has $25,000,000 to spend on advertising and can cut it's margin to 10% in state B and still cover overhead and costs. Mom and pop has no $25,000,000 to spend on advertising. They still have to charge a 25% margin to cover overhead and costs.

The competitive marketing advantage of not having to collect sales tax in a dwindling number of states has nothing to do with the incoherent word salad you tossed up there a few posts ago. As noted, in a few years Amazon will likely be collecting sales tax in all or close to all fifty states so it will be a moot point.

By the way, in your telling this all comes down to big companies having big advertising budgets. Welcome to the last 100 years of retail. Big companies (including Wal-Mart) have hundreds of other competitive advantages over mom and pop. Welcome to capitalism. It's not the government's job to save mom and pop.

Trumpy in his inarticulate way is setting up a large portion of the big Democrat donor base for a yuuuuge scare and rightfully so. He isn't afraid to use Democrat shakedown tactics. Screw principles. Payback is going to be a bitch. Yo Donnie! Trump da Bitch(s)!

Diamondhead said..."The competitive marketing advantage of not having to collect sales tax in a dwindling number of states has nothing to do with the incoherent word salad you tossed up there a few posts ago."

It was very coherent. It just eviscerated your stupid point and you choose to ignore it.

Diamondhead said...

"It's not the government's job to save mom and pop."

The regulations that are dumped on mom and pop are beyond crushing. They are pushed out there by people like Bezos who buy politicians and papers to keep lobbying for more regulation. This is another argument that eviscerates your stupid argument and you choose to ignore.

We don't want government to save us. We want government to stop crushing us.

And yet they seem to do just fine in many cases. Perhaps they have to be a bit more nimble or innovative, or service conscious but they seem to do OK.

Re your calculations, I think you are wrong for 2 reasons:

First, I don't pay shipping in the B&M store. I do, built in the price but so does Amazon plus the postage/UPS to get it from Amazon to me. So figure that is probably around 5% on average. Boom! There goes half the sales tax advantage, in the states where it even exists. Prime may negate some of that but not all. Maybe not even any.

Second, when I buy from Amazon I can't touch and feel the product. Especially important with clothes but important with many other things as well. I can't look through a book like I can in a bookstore. Physical books at least. Kindle has made physical books obsolete for me and I can always get a sample. Sometimes the whole book.

Third, I don't get much if any assistance when buying from Amazon. Fine if I know what I need but a skilled sales clerk is a handy thing at times.

Fourth, When I buy from Amazon I can't take it home with me but have to wait a few days.

Fifth, when I want to return something on Amazon it is a bit more hassle than in the local store.

Stores have lots of ways to compete with Amazon. Not always easy and it takes imagination but lots of companies compete successfully with them.

I hear similar arguments about Walmart. Nobody can compete with them. My local Walmart is fairly typical. Located in a shopping center with 30-40 other stores. Electronics? There is a Radio Shack next door. Auto parts? Autozone across the parking lot (and a Pep Boys, Advance Auto Parts, plus 5-6 locally owned auto parts stores within 1/2 mile). Clothing and shoes? A number of clothing and shoe stores. Groceries and such? A big supermarket (local chain) anchors one end of the center. Pharmacy? Free Standing Walgreens.

And so on.

I might also point out that you never see a lonely Walmart. You could put one up in a field 20 miles from the nearest building and within a year it would be surrounded by businesses selling more or less the same things as Walmart. Ever think about why?

If you can't compete with Amazon or Walmart or other companies, perhaps you don't deserve to be in business. I am not saying it is easy. It's not. But it can be done and it is that competition that makes both your business and Amazon, Walmart, whoever, better for customers.

Sam Walton said many years ago that the Walmart model was about buying things for their customers rather than selling things to their customers. I've pointed that out here several times over the years. If you look at how Walmart operates, their business model, it is absolutely true.

Yes, for 150 years people have been saying that retail is about buying rather than selling. Walmart is one of the few companies to actually act like they believe it.

It just occurred to me that perhaps Amazon operates on that model as well. It would help explain their tremendous success.

FWIW, Walmart's listings have been coming up before Amazon in some recent online purchases of mine. Should be receiving package from them tomorrow. Will be interesting to see how their new subscription based expedited shipping fares compared to Prime if mainstreamed.

"And yet they seem to do just fine in many cases. Perhaps they have to be a bit more nimble or innovative, or service conscious but they seem to do OK."

I don't want amazon out of business. I don't want amazon punished.

But amazon lobbies for regulations that punish us. Paying 25 cents to the government for every dollar we pay employees? OSHA? EPA? Multi tome tax codes? It costs them not much more than it costs us to comply with this garbage and they are much larger.

But what about Amazon subsidizing a business that loses money. Lets say the Washington Post. And the Washington Post constantly writes articles that push for regulations and taxes that benefit Amazon? Is separating Amazon and the Washington Post trampling on free speech rights?

What about companies that cannot afford to buy a newspaper or hire a lobbyist and they get screwed by the ever growing pile of regulation?

Of course there is only one solution to all of this: Less Federal Power.

Of course there is only one solution to all of this: Less Federal Power.

Whatever else we may disagree on, we are shoulder to shoulder on this one. The only reason companies, big and small, buy politicians is because they have something to sell. It may be a positive like special legislation or it may be a negative like Clinton's DOJ did to Microsoft in the 90s.

One of the reasons I had hoped Rand Paul would have done better is because he is a firm believer in less federal power. Less govt power overall, really. Cruz was something of a believer in that as well.

Hopefully Trump, in tearing down the establishment party (dem/rep) will reduce federal power. It may be a slim hope. I will be disappointed though not surprised if he doesn't do it. OTOH, we don't even have that much hope about any one else who has been in the race. (Other than Paul & Cruz)Everybody else wants to expand federal govt power and has not been shy about saying it.

"this story shows that trump is not to be trusted to use doj in the public interest"

I think of that great old movie, "Other Peoples Money".Trump is a bit like the Danny DeVito character, who explains reality several times.

On lawyers for instance -

"Of course I've got lawyers. They are like nuclear weapons, I've got em 'cause everyone else has. But as soon as you use them they screw everything up."

Trump is using the DOJ - not that he has the DOJ, he just has a %probability that he MAY at some point have the DOJ, much like the other side has been using the DOJ, because if the other side does (and it has, and the threat thereof much more), you must too. Looking at things realistically its the only way to a balance of power- to remind the other side that the shoe could well end up on the other foot. Therefore, everybody needs to behave, at the risk of MAD - as DeVito says, to avoid them screwing everything up.

"Hopefully Trump, in tearing down the establishment party (dem/rep) will reduce federal power. It may be a slim hope."

I don't think it is a slim hope. He actually had to deal with all that abused power every time he tried to build something. Where Trump ere's IMO is he is lumping Amazon/WaPo/Bureaucrats/politicians into the same group and his rhetoric is about taking them all down in any way he can.

On the other hand I think it may be impossible to take them down one at a time and by using our own principles. We may have to accept using the weapons that have been used against us.

This is why we need conservatives on the Trump train. If they are not there and sit out over these morals Trump is going to build a coalition with or without them. We can all agree he is not an ideologue. He is a pragmatist. If he has to go for Bernie supporters to get elected he will and and he will continue this march just with fewer people espousing freedom on his side. If the price for not shedding blood is that I guess I would take it. Hillary cannot be allowed to be president.

There is a kernel of truth that WaPo is like Amazon's own K-Street lobbying and PR firm. Having editors saying the boss doesn't directly influence them is a hoot. 99% of the tone set by bosses is indirect and non-verbal. Bezos doesn't have to pull any strings, he just has to be his candid self on a wide variety of issues and the staff will read between the lines.

This story and the pro-Trump Hillary tweet made me think that Teh Dronald has mastered political rope-a-dope

via Wiki: According to Angelo Dundee, the idea for the strategy used against Foreman was suggested to Ali by boxing photographer George Kalinsky, who told him: "Why don't you try something like that? Sort of a dope on the ropes, letting Foreman swing away but, like in the picture, hit nothing but air." Publicist John Condon then polished the phrase into "rope-a-dope".[1]

"no way does amazon harm consumers, which is the relevant question under the antitrust laws"

As Hillary said - "At this point, what difference does it make"? If corporations know that democrats are the only one who reward their friends and punish their enemies, they will support democrats. GOP has no choice, but to join the game.

"As Hillary said - "At this point, what difference does it make"? If corporations know that democrats are the only one who reward their friends and punish their enemies, they will support democrats. GOP has no choice, but to join the game."

Blogger Diamondhead said..."I think the argument is that Wal-Mert is not the only bricks & mortar retailer; Amazon is de facto the only online online retailer."

But they're not really. Amazon may be the largest in their space (like Wal-Mart), but for everything they sell there is a smaller, more focused competitor who can provide something Amazon doesn't (just like Wal-Mart's competitors).

I agree. Amazon is just one stop in online shopping. Many tims I find the same product cheaper in a smaller online store.

I was curious to see if Captain Combover's fans would find his threat to use the power of the federal govt to shut up a media critic offensive. I'm not surprised to find out that they are not offended and apparently would be perfectly happy to see el presidente go after all his enemies with all the power at his command whether constitutional or not. If Combover is elected, I guess my efforts over the next four years will be devoted to supporting the legal groups that fight abusive governmental power - FIRE, Pacific Legal Foundation,Washington Legal foundation, Judicial Watch, etc.

"@Douglas, Trump is only going where William Jefferson Clinton and Barack Hussein Obama have blazed the trail."

If people accept that Trump's motivating principle is winning, and that he values himself above everything else, which I think most of us on agree on, then it is up to Trumpers to get with the rest of us, and get him to understand that to win and have a chance to make America great again, he has to start respecting what made it great to begin with. We don't want to become another of the many crap hole countries where the central government under a "strongman" steps on their laws and principles only to be replaced by another one who does the same but in their "new way", and over and over. That is not change, that is not American, that is simply being a placeholder in the demise of a great experiment that is far from over. This election is a key test in that experiment. It's not about Trump. It's about us. We are saying loud and clear what we don't accept anymore by nominating him. Now we need to be clear about what we DO want. I'm not hearing much of that. OK, he's different. So is a bull in your back yard. How is a series of flexible suggestions anything new? Demand better of him, or you will get what he wants, not what you do. Don't simply trust a politician to do the right thing. Don't be a Trump University alumni.

Amazon is the closest to honest neutrality of the giant tech companies. Going after Amazon - and on the specious grounds that its founder also owns a newspaper that was demanding regulation for decades before he bought it - makes no sense whatsoever.

What's the lesson supposed to be? Maintain political neutrality and we'll turn the lawyers loose on you? But a Google or a Twitter or a Facebook has nothing to worry about? Absurd. Stupid. Sad!

Bagoh2O @9:53: You're arguing for a stronger Congress to stand against the executive "Strongman." Why don't we have that?

Why is Congress so weak and ineffectual? There are many possible reasons. One answer is that monied interests buy them off a quickly as possible. How else to explain Paul Ryan? I still don't buy it. Read on.

The Founders never put in place an Electoral College or a delegate system for electing Congress(wo)men. That part was always direct democracy. Something fundamental has changed with time. My culprit is gerrymandering and the consequent enabling of safe (extremist) seats which naturally leads to polarization. YMMV.

If Combover is elected, I guess my efforts over the next four years will be devoted to supporting the legal groups that fight abusive governmental power - FIRE, Pacific Legal Foundation,Washington Legal foundation, Judicial Watch, etc.

If you'll start doing so with a Trump election, I must wonder why you haven't been doing this for years. It's not like Obama hasn't trampled on the concept of free speech for years now.

What's the lesson supposed to be? Maintain political neutrality and we'll turn the lawyers loose on you? But a Google or a Twitter or a Facebook has nothing to worry about? Absurd. Stupid. Sad!

Oh, Google should be facing anti-trust investigations by the truckload. Twitter is a dumpster fire.

Allow me to "trumpkinspain" -- WaPo writers are seen monolithically because they act monolithically. There are exceptions: Woodward? But the rest are just defending their political rice bowls in DC. It's amazing how oversimplified it looks, but it works.

New slogan: "I'm for Trump, because he's going to do something to increase my transaction costs at Amazon, and possibly obliterate what's left of federalism!"

2015 Results AMZN Revenue: 107 billionIncome before taxes: 1.568 billion or 1.46%Income after taxes: .618 billion or .57%Amazon pays no dividend. Because it can't on these results.

The second two figures were negative for 2014 on 89 billion in revenue (-.111 EBT, -.278 EAT (however tax on losses works for that company).

"Murder" redefined, by Trump. It seems however that it's the shareholders' capital that is being abused with some killing likely to come, though they asked for it (see pie-in-the-sky 292 P/E as of Friday).